Economists at Goldman Sachs said the risk of a US recession is receding amid a persistently strong jobs market and
The Goldman team led by Jan Hatzius cut its estimate for the probability of a recession in the next 12 months to 25% from 35%. By contrast, Bloomberg's survey of economists last month pointed to a 65% chance of a downturn within that time. Historically the typical chance of a recession in any 12-month period is roughly 15%.
"Continued strength in the
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Goldman also pointed to a rapid slowdown in
Better-than-expected growth in other major economies will also be helpful for the US, Goldman said, predicting that the euro area will avoid a recession and China will rebound rapidly.
On financial markets, the resilience of the economy "should support cyclical assets," although upside for investors may be capped because equity valuations are already high, especially in the US, and profit margins are elevated, according to Hatzius.